Tag: news

‘Police Lied’ About Stormy Daniels Sting, Says Whistleblower: Reason Roundup

Stormy sting fallout continues. A whistleblower within the Columbus, Ohio, Police Department has leaked emails suggesting that contrary to official statements, the recent arrest of Stormy Daniels at Sirens strip club was planned months in advance.

After the arrest, Columbus police stated that they just happened to be at the club as part of an “ongoing investigation into human trafficking, prostitution, and other vice-related offenses” when Daniels thrust her breasts in an officer’s face and they had no choice but to arrest her, owing to an Ohio law that bans nude or semi-nude workers from touching customers or themselves in certain areas.

But “a whistleblower from the City of Columbus contacted the [Fayette] Advocate with numerous emails between several high-ranking Columbus police detectives and VICE officers,” the newspaper reports. And these emails suggest that police intentionally went to Sirens that night to arrest Daniels. From the Advocate:

Inside the emails are news clippings discussing Daniels’ planned appearance in Columbus, pictures of Daniels with President Donald Trump, videos of her dancing, and even a map to the club where she would be performing, all sent days before she would pull into town on her tour bus.

The bulk of the emails that the whistleblower provided are from the email account of Detective Shana Keckley. Keckley was one of the lead-arresting officers the night that the “sting” operation went down.

The whistleblower told the Advocate that “It is clear that Keckley and her fellow officers were there because of Stormy and only because of Stormy,” and that “the police lied about it being a prostitution and human trafficking mission.”

The charges against Daniels were dismissed less than a day later, and charges against two other Sirens workers arrested that night—waiter Miranda Panda and dancer Brittany Walters—were dismissed the following week. Columbus Police Chief Kim Jacobs called the arrests a “mistake.”

Columbus City Attorney Zach Klein said that “after reviewing the charges for each of these cases closely, I’ve determined that the facts of these cases do not meet the elements required to prosecute under this law.”

“None of the three cases properly allege that the women made ‘regular appearances’ as required by law,” notes the city in a statement. In addition, “the charges against Walters and Panda have other unique issues. Brittany Walters did not meet the requirement of ‘touching a ‘patron’,” and Miranda Panda did not meet the requirements of appearing ‘nude or semi-nude’ while working as a server, and was working only her third shift ever at Sirens.”

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Impeachment articles for Rod Rosenstein are “wrong and baseless” says Andrew Napolitano. Eleven Republican lawmakers from the House of Representatives’ “Freedom Caucus” filed the articles of impeachment against Rosenstein on Wednesday, accusing him of deliberately withholding from Congress documents related to the Justice Department’s pre-election investigations into Donald Trump and Hillary Clinton.

A vote on the articles is not guaranteed. Still, the move is “embarrassing for everybody involved,” said Judge Andrew Napolitano.

“Improperly signing off on a FISA warrant” and staying in a position despite a conflict of interest may be “ethical violations but not impeachable” offenses, Andrew Napolitano explained to a gaggle of grumbling Fox News anchors yesterday. He went on to call the move “wrong and baseless.”

“I want this Mueller thing over as soon as possible,” Napolitano continued, “but it is still pending and you’d be interfering with it if you force the public revelation of some of those documents.”

FREE MARKETS

You keep using that word—I do not think it means what you think it means….

FOLLOW-UP

ACLU alleges yet more abhorrent behavior from ICE. Immigration officials tricked migrant parents into signing away reunification rights to their children, according to the American Civil Liberties Union (ACLU). “Some parents said they thought they were signing paperwork that would, in fact, allow them to reunite with their children,” reports The Washington Post based on ACLU’s court filings. “Others described being crowded into rooms with dozens of people, given only a few minutes to fill out forms that would determine whether they would reunite with their children or leave them behind in the United States. They signed the forms out of fear, or confusion, or a belief that they had no other choice, lawyers wrote in the court filing.”

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Why It Might Be A Good Time To Revisit Ray Dalio’s 1937 Analog

Authored by Jesse Felder via TheFelderReport.com,

It was over three years ago that Ray Dalio first proposed his 1937 analog.

After the presidential election, he refreshed it in the context of growing global populism so that it looks like this:

  1. Debt Limits Reached at Bubble Top, Causing the Economy and Markets to Peak (1929 & 2007)

  2. Interest Rates Hit Zero amid Depression  (1932 & 2008)

  3. Money Printing Starts, Kicking off a Beautiful Deleveraging  (1933 & 2009)

  4. The Stock Market and “Risky Assets” Rally  (1933-1936 & 2009-2017)

  5. The Economy Improves during a Cyclical Recovery  (1933-1936 & 2009-2017)

  6. The Central Bank Tightens a Bit, Resulting in a Self-Reinforcing Downturn (1937)

And if these fundamental parallels weren’t enough, we now have a rather interesting price parallel to consider. The correlation between the S&P 500 over the past four years (black and white candles in the chart below) and the four years leading up to the 1937 top (blue candles) is roughly 94%. As I have suggested in the past, price analogs are not very valuable on their own but when the fundamentals also parallel closely they become far more interesting.

In this case, the fundamental parallels are only getting tighter as time passes. Despite the yield curve currently sending a clear red flag, the markets are now pricing in better than even odds of two more rate hikes this year. It seems ‘central bank tightening into a self-reinforcing downturn’ is becoming a more distinct possibility as the economic cycle ages and inflation pressures grow. In other words, “the policy stakes are now very high,” and history provides a clear road map for markets.

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Bund Yields Rise On Draghi’s Inflation Comments, Upbeat Assessment

While Draghi has so far failed to provide more context on the forward guidance of the “summer of 2019” threshold for low rates, keeping the same language as last month, as part of his prepared remarks he added a paragraph that indicates the ECB president is generally happy with the state of the European economy:

“While uncertainties are notably related to the global trade environment remain prominent, the information available since our last monetary policy meeting indicates that the Euro area economy is proceeding along a solid and broad-based growth path. The underlying strength of the economy confirms our confidence that the sustained convergence of inflation to our aim will continue in the period ahead and will be maintained even after a gradual winding down of our net asset purchases.”

Additionally, his language on trade risks was also unchaged, although Draghi did make the following somewhat downbeat comments on the Trump/Juncker deal, saying it was a “good sign [but] too early to tell”. Answering a question about the deal, Draghi said that the ECB had “taken note” but that it is “too early” to say anything about the content. and that “it’s a good sign” because there is a “willingness to discuss trade issues in a multilateral framework again.”

Draghi also said that the reinvestment of maturing bonds “wasn’t discussed.”

But what the market appears to be most focused on is Draghi’s comments on inflation: here Draghi said that “uncertainty around inflation is receding”, that “underlying cots pressures are strengthening” and “underlying inflation to rise gradually in medium term”, and finally that he sees “some encouraging signs on inflation” even if it is “too early to call victory on inflation.”

As a result, the EUR ticked up modestly, if briefly, but has since given up much of the gains as Draghi sidesteps comments on the euro:

  • Draghi: Exchange Rate Isn’t A Policy Target
  • Draghi: Euro Has Appreciate Considerably Over Past 12-18 Months

… while 10Y Bunds are drifting higher concerned about Draghi’s generally favorable outlook amid warnings on rising prices.

Finally, some more headlines from the conference:

Bloomberg headlines:

  • DRAGHI: ECB READY TO ADJUST ALL INSTRUMENTS AS NEEDED
  • DRAGHI: QE STOCK, REINVESTMENTS, GUIDANCE PROVIDE STIMULUS
  • DRAGHI: SIGNIFICANT MONETARY POLICY STIMULUS STILL NEEDED
  • DRAGHI: INFLATION ADJUSTMENT TO CONTINUE AFTER BOND BUYING ENDS
  • DRAGHI: ECONOMY PROCEEDING ALONG SOLID, BROAD-BASED GROWTH PATH
  • DRAGHI: UNCERTAINTY RELATED TO TRADE REMAIN PROMINENT
  • DRAGHI: RISKS TO GROWTH OUTLOOK REMAIN BROADLY BALANCED
  • DRAGHI: GROWTH IN GLOBAL DEMAND TO BOLSTER EURO-AREA EXPORTS
  • DRAGHI: RISK OF HEIGHTENED MARKET VOLATILITY NEEDS MONITORING
  • DRAGHI: GLOBAL UNCERTAINTY, THREAT OF PROTECTIONISM PROMINENT
  • DRAGHI: DIRECT EFFECTS OF IMPLEMENTED TARIFFS LIMITED
  • DRAGHI: TRADE WAR WOULD CREATE ENTIRELY DIFFERENT CLIMATE
  • DRAGHI: MID-TERM OUTLOOK FOR GROWTH, PRICES UNCHANGED FROM JUNE
  • DRAGHI: SOME SLUGGISHNESS FROM 1Q CARRIED INTO 2Q

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Can Border Agents Search Your Phone Without a Warrant?: New at Reason

In Riley v. California (2014), the U.S. Supreme Court held that law enforcement officials had violated the Fourth Amendment when they searched an arrestee’s cellphone without a warrant. “Modern cell phones are not just another technological convenience,” Chief Justice John Roberts wrote for the majority. “With all they contain and all they may reveal, they hold for many Americans ‘the privacies of life.’ The fact that technology now allows an individual to carry such information in his hand does not make the information any less worthy of the protection for which the Founders fought.”

The requirement to get a warrant may not apply, however, when an American citizen is returning home from abroad and U.S. border officials want to search the contents of that person’s phone—at least according to a decision issued in March by the U.S. Court of Appeals for the 11th Circuit, writes Damon Root.

View this article.

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Durable Goods Orders Disappoint, But Military Spending Saves The Day

After two months of declines, Durable Goods Orders were expected to rebound handsomely in June… they didn’t.

Against expectations of a 3.0% MoM surge in Durable Goods Orders, the Census Bureau reported a meager +1.0% increase…

This is the biggest miss since Oct 2017

However, thanks to the military-industrial complex – which saw defense spending rise 20.2% MoM – the number remained positive…

This is the 3rd month in a row of massive monthly increases in military spending.

Remember, war is a racket.

The silver lining in the report is that shipments of those goods, used to calculate gross domestic product, rose 1% (beating the expectations of a 0.4% rise) after a 0.2% increase…

This is the best monthly gain since Sept 2017.

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Watch Live: Mario Draghi Reassures The World That The End Of ECB QE Will Be A Nothing-Burger

After another ECB statement that offered no surprises, we suspect Mario Draghi will be trying his best to reassure the world (especially European corporate bondholders) that everything is still awesome despite the fact that the market’s bidder-of-first-and-last-resort is stepping away…

It seems the market is front-running him…

Live Feed (ECB presser due to start at 0830ET)…

 

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Goldman: Ceasefire With Europe Will Make Trump’s Trade War With China Even Worse

The market was euphoric when Trump and Juncker yesterday announced a temporary ceasefire and de-escalation in the trade war between the US and Europe, announcing an agreement to negotiate tariff reductions and to increase US exports to the EU. It also lowered the risk of US tariffs on European auto imports, which is why the European auto sector is surging 2.3% this morning.

That’s the good news. The bad news, according to Goldman, emerges when looking at the fine print, or rather lack thereof: as Goldman economist Alec Phillips writes, “the lack of specifics in today’s US-EU announcement raises the possibility that the negotiations could falter at a later stage, as US-China negotiations did earlier this year.”

But a far bigger risk is that the agreement with Europe, which saw Juncker explicitly siding with the US on several occasions against China, “is also likely to embolden the White House to use proposed tariffs to try to win concessions from other trading partners, like China. The recent announcement of supplemental agricultural subsidies to counter the effects of retaliatory tariffs pushes in this direction as well.”

This will only be accentuated by China’s last-minute decision to scuttle the Qualcomm-NXP merger which Trump has pushed for in recent months and was seen as China’s olive branch in exchange for Trump letting ZTE “live.”  And even tough China’s commerce ministry spokesman Gao Feng says at briefing today that the Qualcomm-NXP deal is about market monopoly and has nothing to do with trade tension between China and the US, that’s a flat out lie.

In other words, Goldman warns against believing that recent positive developments regarding US-EU trade should be interpreted as a reduction in risk in the other major trade dispute, with China. “In fact, they likely mean the opposite.“

Some more details. First, Goldman lays out what was agreed on, and what wasn’t:

The announcement did not mention EU auto tariffs specifically, even though reducing the differential between the EU’s 10% tariff on auto imports and the US 2.5% tariff on cars has been a frequently cited White House goal. This could reflect internal EU disagreement over the issue or it could represent a strategy to save auto tariff reductions until later in the negotiation.

While the announcement is a clearly positive development, and was interpreted as such by financial markets, it is in some respects reminiscent of the state of US-China negotiations earlier this year after tariffs had initially been proposed. In that case, after initial negotiations regarding increased exports of agricultural and energy products, among other issues, Treasury Secretary Mnuchin declared that the trade war with China was “on hold”. That situation did not hold for long, however, and the proposed tariffs were eventually implemented earlier this month. The US-EU announcement is somewhat more specific and somewhat more likely to result in a formal agreement, but follow-through remains a clear risk.

More importantly, here is Goldman’s read though on what the EU decision means for trade war with China:

.. these programs seem likely to give the Trump Administration more political flexibility to impose additional tariffs on imports from China, in our view. Rural voters voted disproportionately for President Trump in 2016 and most rural areas have Republican representatives in Congress. Retaliatory tariffs recently implemented by China are particularly focused on agricultural exports that would impose disproportionate economic losses in rural areas and could weaken support for the President’s trade agenda among these constituencies. Additional subsidies are likely to reduce this effect, though they will probably not reverse it entirely.

Overall, developments over the last few days suggest that risks from trade policy are becoming more concentrated on the US-China trade relationship. The preliminary US-EU agreement could lead the White House to believe that imposing tariffs on imports from China could increase the probability of a US-China agreement. With subsidies in place to guard against some of the domestic economic fallout from retaliatory tariffs, the White House is likely to have additional political flexibility to pursue that strategy.

This is hardly a surprise, and the market reacted accordingly, because while European stocks, and especially industrials and autos, were broadly higher, China’s Shanghai Composite sunk back under 2,900 despite Beijing unleashing a torrent of monetary and fiscal stimulus in recent weeks…

… suggesting that traders are already bracing for the next trade war round, which could be announced by Trump’s twitter account at any moment.

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Trump Blasts Twitter “Shadow-Banning” Conservatives

Jack Dorsey may have pushed his apparent anti-conservative agenda just a little too far after evidence mounts – even among the liberal media – that Twitter has been ‘shadow-banning’ various ‘right of socialist’ members on the social media site ( by limiting the number of people who are able to view content from the affected users).

Following CEO Jack Dorsey’s attempt to play down the actions, saying “It suffices to say we have a lot more work to do to earn people’s trust on how we work.”

We’ve heard questions from some of you relating to our work to drive healthy conversation on Twitter. People are asking us 1) about the breadth and precision of our work & 2) the impact of our work on the Search experience. We wanted to address these questions transparently here.

In May, we started using behavioral signals and machine learning to reduce people’s ability to detract from healthy public conversation on Twitter. This approach looks at account behavior & interactions with other accounts that violate our rules.

On 1) We’re always working to improve our behavior-based ranking models – their breadth and accuracy will improve over time. It’s important to note that these behavior signals are not binary, and they are one of many other signals that factor into ranking.

To be clear, our behavioral ranking doesn’t make judgements based on political views or the substance of tweets. We recently publicly testified to Congress on this topic https://judiciary.house.gov/wp-content/uploads/2018/07/Pickles-Testimony.pdf

On 2) Some accounts weren’t being auto-suggested even when people were searching for their specific name. Our usage of the behavior signals within search was causing this to happen & making search results seem inaccurate. We’re making a change today that will improve this.

We believe this work is really important to creating a healthier Twitter and we want to continue improving. Your feedback helps us do that so please keep it coming.

And after his son blasted Dorsey…

President Trump has decided to step into this debacle (presumably in an effort to avert Dorsey’s attempt to ‘meddle’ in the midterms), warning that ” We will look into this discriminatory and illegal practice at once! “

Trump’s tweet comes after his 2020 campaign manager, Brad Parscale, along with Republican National Committee (RNC) Chairwoman Ronna McDaniel, wrote a letter in May calling for the CEOs of Facebook and Twitter to address concerns over conservative censorship ahead of the 2020 election, as well as a call for transparency.

“We recognize that Facebook and Twitter operate in liberal corporate cultures,” the letter reads. “However, rampant political bias is inappropriate for a widely used public forum.”

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Stop Subsidizing the Crony Capitalist European Bank for Reconstruction and Development: New at Reason

The European Bank for Reconstruction and Development, or EBRD, is an international bureaucracy set up in 1991 after the collapse of the Soviet empire, ostensibly for the purpose of promoting capitalism in the post-communist world, and the United States is its largest financial supporter. Not surprisingly, its mission has since expanded to cover many other countries, as well as various noble-sounding causes.

But as Veronique de Rugy explains, there are countless flaws with the EBRD. Among them: It is cronyism, plain and simple. The bank picks winners and losers in the marketplace. The winners—often better-connected firms—benefit from an unfair advantage over their competition in the form of subsidies, lower borrowing costs, and other perks. Tough luck if you’re an unsubsidized firm competing in that market.

It’s time for the U.S. to pull out of the EBRD.

View this article.

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ECB Repeats June Statement: Pledges QE End By Year End

As previewed moments ago, there were no surprises in today’s ECB statement, which kept rates unchanged and using last month’s dovish tightening twist, pledged to keep them unchanged “at least through the summer of 2019” while repeating the announcement from last month that QE “will be reduced to €15 billion until the end of December 2018 and that net purchases will then end.”

Full statement below:

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.

Regarding non-standard monetary policy measures, the Governing Council will continue to make net purchases under the asset purchase programme (APP) at the current monthly pace of €30 billion until the end of September 2018. The Governing Council anticipates that, after September 2018, subject to incoming data confirming the Governing Council’s medium-term inflation outlook, the monthly pace of the net asset purchases will be reduced to €15 billion until the end of December 2018 and that net purchases will then end. The Governing Council intends to reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of the net asset purchases, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today.

While the statement was a snoozer as expected, we now look forward to Draghi’s press conference in 45 minutes which should be an equally boring event.

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